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The Internal Revenue Service has announced increases in inheritance and gift tax exemptions for 2027.
The agency announced Thursday that it increased the federal government’s “basic deduction” from $15 million in 2026 to $15.48 million per person in 2027. This deduction applies to tax-free transfers during life and at death.
National property tax and inheritance tax exemptions may be lower.
The IRS also raised numbers for dozens of other provisions, including federal income tax brackets, capital gains tax brackets, and eligibility for the earned income tax credit.
The inflation adjustment for 2027 comes as Americans grapple with affordability amid rising costs for housing, food, gasoline and other living expenses.
President Donald Trump’s “Big and Beautiful Bill” expanded the estate and gift tax exemption to $15 million per person. Barring any changes from Congress, the exemption amount would have returned to 2017 levels ($5 million plus inflation adjustment) after 2025, encouraging aggressive real estate planning among the ultra-wealthy even before the bill was passed.
Under current law, few households are subject to federal estate tax. The Tax Policy Center think tank estimates that households will file about 6,890 federal estate tax returns in 2026, of which about 3,900 will be taxable.
